Thousands of Ugandan youth are starting businesses, but many are collapsing within months, not for lack of ambition or effort, but because of poor financial habits and lack of basic planning.
As Uganda grapples with rising youth unemployment, experts are now turning the spotlight on an often-overlooked factor undermining the success of youth-led start-ups: financial illiteracy.
Carolyn Mary Amase, a Financial Literacy Master Trainer and Business Development Coach at Trade Avenue Uganda, believes that poor money management, not just a lack of capital, is a silent killer of youth enterprises.
A Generation of Dreamers without a Plan
“Young people have ideas and energy, but when it comes to managing money, budgeting, saving, planning, they’re often flying blind,” Amase told Business Times Uganda.
Many youth, driven by the urgent need to escape unemployment, dive headfirst into entrepreneurship. But without proper financial grounding, their ventures are vulnerable from the start.
According to Amase, some youth view entrepreneurship as a fast track to wealth, but fail to understand that business success is built on discipline, planning, and financial prudence.
“They start businesses without conducting market research, borrow money without repayment plans, and spend without tracking expenses,” she said.
The Numbers Tell a Grim Story
Recent data from Uganda’s 2024 National Population Census reveals that over 10 million Ugandans between the ages of 18 and 30 are unemployed accounting for nearly half of the country’s youth population. In the face of this joblessness, many youth are encouraged to turn to entrepreneurship.
However, Amase warns that even with innovative ideas, most start-ups led by young Ugandans fail within the first year.
“It’s not because they’re lazy or incapable, it’s because they lack foundational financial knowledge. They don’t know how to price products correctly, track cash flow, or even differentiate between personal and business finances,” she explained.
Chasing Appearances over Sustainability
Social pressure and the desire to project success also contribute to poor money decisions among young entrepreneurs.
Amase points out that many youth are influenced by what they see on social media, leading them to adopt lifestyles that their finances can’t support.
“They want to look successful before they actually are. Some use their start-up capital to buy expensive clothes, gadgets, or rent flashy office spaces just to appear credible,” she said.
She continued and warned the youths that if they misuse their seed money, their businesses are already in trouble.
This “fake it till you make it” mentality, according to Amase, is a major reason businesses fail to grow beyond the initial stages.
Micro-Saving: A Simple yet Powerful Strategy
Instead of chasing overnight success, Amase encourages youth to embrace a culture of micro-saving setting aside small amounts regularly to build financial resilience.
“You don’t need millions to start saving. What you need is consistency,” she advised. “Even if you’re earning very little, setting aside a few thousand shillings a week can accumulate into meaningful start-up capital over time.”
Savings, she added, act as both a safety net and a stepping stone. Youth who develop the habit of saving are better prepared to handle business emergencies and are less likely to fall into debt traps.
Entrepreneurship Needs More Than Skills Training
While Uganda has seen a rise in government and private sector efforts to provide vocational skills and start-up training, Amase insists that financial literacy must be part of the conversation.
“We’ve seen youth get start-up funds or go through business boot camps, only to misuse the money within weeks,” she explained.
“Without financial literacy without knowing how to budget, manage debt, or track profits skills alone won’t save a business,” Amase urged.
She highlighted how poor debt management is especially destructive. Some youth take out loans with high interest rates to start businesses, but without a repayment strategy, they default and sink deeper into financial trouble.
The Fear of Missing Out
Amase notes that another trend harming youth start-ups is impulsive investing, often driven by fear of missing out.
“Many young people hear about someone making quick money through cryptocurrency, forex trading, and other digital schemes, and they rush in without understanding the risks,” she said.
Instead of building solid, long-term ventures, they end up chasing short-term wins and often suffer heavy losses.
“Financial education can help them distinguish between a real opportunity and a scam, it teaches patience, risk assessment, and the value of due diligence,” she stressed.
Early Financial Education Is Key
To truly change the tide, Amase calls for a national investment in early financial education. She believes financial literacy should be introduced in schools and reinforced by families and community institutions.
“Young people need to grow up understanding money, not just how to spend it, but how to manage, save, and grow it. We need to normalize discussions about budgeting, investment, and smart borrowing,” she said.
She advocates for more financial boot camps, peer mentorship programs, and youth-friendly digital content to bridge the knowledge gap.
A Path Forward
Despite the current challenges, Amase remains optimistic. She sees a growing shift among youth who are eager to learn and take control of their financial futures.
“Uganda’s young people are not lazy, they’re just lacking tools and support. If we combine mindset change with practical financial education, we can turn struggling start-ups into thriving businesses,” she concluded.
The path to economic empowerment, she argues, is not paved solely with job opportunities or funding. It begins with the simple but powerful act of learning how to manage money.